Morocco - Future trends

Morocco entered the 21st century in economic decline. For much of the
last century, state control of the economy had reduced the economy to
shambles. However, the economic reform programs of the early 1990s have
set the stage for partial economic recovery. Some progress has been
achieved as the government has curtailed spending, increased
privatization, reduced trade barriers, and stopped direct credit and
foreign exchange allocation. In addition, Morocco's trade
position should improve as its major trade partners in Europe experience
growth and the economic recovery in Asia.

The pace of Morocco's economic reform program, however, has been
rather slow. Despite major reform efforts, the public sector continues
to be an important force in the economy. Long-term challenges include
servicing the country's
external debt
, further privatizing state-owned enterprises, and attracting foreign
investment. More important, the government is faced with the daunting
challenge of improving living standards, which have steadily declined
over the last few decades, creating new job prospects for the youth, who
account for over 50 percent of the population. If left unresolved, the
problem of unemployment may potentially become a source of political
instability and a credible challenge to the regime.